RNaseIII is a double-strand specific endoribonuclease that has different functions in E. coli. It processes rRNA precursors for efficient maturation into ribosomes. It processes some mRNA either to activate gene expression or to reduce gene expression. It regulates mRNA degradation. The int gene of phage lambda is transcribed from two promoters yielding different mRNA transcripts. Int expression from one is reduced by RNaseIII; from the other, expression is enhanced. In both cases, control of expression by RNaseIII occurs from a single site beyond the gene. This form of control is named retroregulation. The site present on the RNA is able to form a special stem and loop structure that is recognized by RNaseIII. This site is also a transcription termination signal for RNA polymerase. In order to understand how RNaseIII levels in the cells are modulated, its gene in E. coli. rnc. has been cloned on lambda vectors and on pBR322 plasmid. Sequence analysis indicates a second gene in an operon with rnc. This gene produces a protein with significant homologies to the yeast ras genes and is called era (E. coli ras). Both rnc and era have been placed on expression vectors and their proteins have been purified and antibodies have been made. Era is an essential gene in E. coli. The purified protein binds guanosine triphosphate (GTP). E. coli mutants have been isolated that are conditionally lethal because of mutations in rnc and era. Suppression mutants that restore growth are being analyzed to determine proteins that may interact or compensate for the products of these genes. E. coli mutants have been isolated that are conditionally lethal because of insertion mutations blocking expression of era. Rnc has been demonstrated not to be an essential gene in E. coli. The purified rnc protein binds adenosine triphosphate (ATP). A separate insertion mutation that abolishes rnc function, but permits era expression, is being analyzed. The regulation of the operon is being investigated, and preliminary results suggest a system of autoregulation.